Тoday, the National Bank of Macedonia Council held its twelfth session at which the latest macroeconomic developments were presented
Skopje, 29 December 2011
Press release of the NBRM
Тoday, the National Bank of Macedonia Council held its twelfth session at which the latest macroeconomic developments were presented.
Inflation in the economy follows the projected path, so that in November the annual inflation rate was 3.5% and the average core inflation remained at the level of 1.2%.
In line with the expectations for slower economic growth in the second half of the year, gross domestic product in the third quarter registered real annual growth of 2.3%, which is more than twice lower relative to the growth in the second quarter. Also, the physical volume of industrial output has registered a decline on an annual basis for the third consecutive month, which in November reached 5.3%.
According to the latest data on the balance of payments, in the third quarter of the year current account surplus was higher than expected (0.6% of GDP), mainly due to better performances in private transfers and services. In addition, in the capital and financial account net outflows of 1.3% of the gross domestic product were recorded. Gross foreign reserves recorded a steady growth relative to the end of 2010 and as of December 23, they amounted to 2,018.1 million, maintaining the appropriate level.
In November, slower annual growth of savings was recorded, with a moderate strengthening of the growth in the credits to the private sector, which is consistent with the expected movement of these aggregates, and their growth dynamics is expected to continue until the end of the year.
The National Bank Council reviewed the Report on the Banking System of the Republic of Macedonia in the third quarter of 2011. It was concluded that in the third quarter of 2011, the banking system maintained its stability and reliability, amid further strengthening of the liquidity and solvency and a slight intensification of the credit risk. The activities of banks increased, but at a slower pace compared to the previous quarter. Total assets registered quarterly growth of 1.3% and as of September 30, 2011 they equaled Denar 321,168 million (the annual growth rate stood at 11.6%). The increase in activity was mainly provided by the growth of deposits, which on a quarterly basis rose by 2.6% (the annual deposit growth rate amounted to 11.7%). Banks have directed most of the growth in the sources of funds toward loans to non-financial entities. Quarterly and annual growth rate of loans slowed down, and stood at 1.4% and 8.3% respectively.
Banks have directed part of the growth of the sources of funds towards short-term placements with foreign banks, which contributed to further strengthen their liquidity, which remained stable and relatively high. Nearly one-third of the total assets of the banking system is liquid assets. Liquid assets of the banking system provide high coverage (by nearly 60%) of household deposits.
Exposure to credit risk slightly increased, as seen through the acceleration of the growth of non-performing loans. As of September 30, 2011, the share of non-performing loans in the total loans to non-financial entities equaled 9.8%. However, the risks of deteriorating quality of loan portfolio are mitigated given the full coverage of non-performing loans with impairment and special reserve.
The capital adequacy ratio in the banking system is more than twice over the prescribed minimum level (16.7% as of September 30, 2011) and provides sufficient capacity to absorb any adverse shocks from further increase in the risks. This is confirmed by the results of stress-test simulations, through which the National Bank analyzes the resistance of the banking system to various adverse shocks (including the possible risk scenarios associated with the current situation in the euro area). The results show that the capitalization of banks is satisfactory and that the banking system is resistant to external shocks.
The Council adopted the amendments to the Decision on the Methodology for Determining Bank Net-Debtor. With these amendments the bank's exposure to natural persons based on credit cards and current accounts amounting up to 500 thousand, will be disregarded in determining bank's net-debtor.
The Council reviewed and adopted the Work Programme for 2012, it reviewed and adopted the Work Programme of the Internal Audit Department for 2012 and Medium-Term Programme for Internal Audit for the period 2012-2014, as well as the Financial Plan and Investment Plan for 2012 .
The Council also considered other matters within its jurisdiction.
Governor's Office